Oil prices could inspire alternative: Costello [21apr06]

TREASURER Peter Costello wants innovation to ease the "enormous pain" felt by motorists.

He said alternative fuel makers should take advantage of record oil prices, which have hovered above $US70 this week and hit $US72 for a barrel of crude overnight, with experiments to produce new forms of energy.

"In a market situation, when the cost of one form of energy goes up, other forms of energy start getting more competitive and the investment signal goes out to those alternatives to start experimenting and start producing," Mr Costello said in Sydney.

He named the vegetable oil-derived "biodiesel" and liquid petroleum gas (LPG) as first points for innovation.

"Longer term obviously, from an industry point of view, solar and other alternative technologies are going to be of interest to people," he said. Mr Costello reiterated his concerns that Australia's six-month period of high petrol prices had continued longer than expected and, he warned, there appeared to be no end in sight.